It is quite difficult to acquire venture capital. Therefore, majority of the small businesses might need to consider alternative financing options. One of the most popular methods of raising initial capital is ‘crowdfunding’.
When a business is developing a service or product, it can fund the business operations via pre-orders. It is also possible to provide other rewards for incoming donations. Businesses can now undertake crowdfunding for equity, through popular platforms like Fundable.
Participate in start-up competitions
The founder of The Mommy MD Guides, Jennifer Reich, decided to create a short video while participating in a huge contest organized by Office Depot. The ‘Survival of the Smartest’ contest was especially organized for small businesses. Reich won the contest and received a highly generous amount to meet her office supplies need. Keep a lookout for such exciting start-up competitions to raise capital or to support the expenses of your new venture.
Office equipment financing
This is also termed as ‘vendor financing’. It is much easier to get funds for tangible business assets as opposed to a cash advance or personal loans. If your business requires tangible products as part of the inventory, then you can probably convince several distributors and manufacturers to defer the due amount till the goods get sold.
Typically, this implies extending the standard 30-day payment period to a couple of months or so. The extension period is usually decided basis the extra fees and credit worthiness of the business/entrepreneur.
Get Angel investors
To begin the process of fund collection, it is best to first ask around within your family and friend circle. Get their suggestions and explore additional networking opportunities. Something as simple as your folks’ Christmas card list could help you reach out to the right people, those who would be excited to invest in your project.